A parosteal lipoma is a benign tumor containing mature adipose tissue and is intimately related to the adjacent periosteum. We experienced a very rare case of parosteal lipoma arising from the shaft of femur. A 46 years old lady visited the hospital with complaining of slowly growing mass in her thigh for 7 month. Initially, it was difficult to differentiate from osteochondroma, parosteal osteosarcoma or liposarcoma. Based on the assessment of plain radiogram and magnetic resonance imaging, it was suspected the parosteal lipoma or osteosarcoma. Marginal excision was performed, and it was confirmed to parosteal lipoma histologically. We present the case with review of literatures.